As a veteran that is home shopping, chances are that using your VA home loan benefits is somewhere in your purchasing plan. The program provides a lower interest rate, and loans are typically easier to qualify for. Yet, don't walk blindly into the loan process. There are still things that you need to do to ensure you get the best VA loan possible. The following tips can help.
Tip #1: Improve your credit
Although VA loans have laxer credit standards and no minimum score requirements when compared to conventional loans, a good credit score helps ensure you get the lowest rate possible. Before applying for your loan, pay off any outstanding debts. Those that are past due should be paid first, then larger debts should be paid off or at least lowered. As a general rule, you don't want your credit utilization to be more than half of your available credit lines. By paying things down then waiting a couple of months to apply for your loan, you can do so with the highest score possible.
Tip #2: Review your eligibility
Not everyone is eligible for a VA loan, so make sure you are before applying so you can avoid wasting your time. Active duty and retired veterans must have served 181 days, with the exception of Gulf War vets that can qualify with as little as 90 days of service. Widow and widower spouses can also qualify, with some caveats. Even National Guard and Reserve members may be able to secure a VA loan, although the minimum service term is much higher at six years prior to loan application. If you aren't quite eligible yet, it may be worth it to wait until you are so you can take advantage of the lower interest rate of the VA loan.
Tip #3: Prepare your documentation
Before applying, review your credit and income history. This is especially important if you are no longer enlisted since you will need to show the lender that you can bring in enough income to cover your house payment. If there are any gaps in your employment history, draft a letter that explains the reasons for the gaps. The same goes for your credit history. If there are any negative marks on your credit history, write a letter explaining the circumstances for the negative mark and the steps you took to rectify the problem.
For more help, contact a VA home loans provider in your area.